Understanding What Self Assessment Is
Self Assessment is HMRC’s method of collecting Income Tax from individuals who don’t have their full earnings taxed automatically through the PAYE system. While most employees have taxes deducted directly from their wages, many others receive income from sources that aren’t taxed at the source. These include rental properties, dividends, freelance work, or capital gains, to name just a few.
The UK tax year runs from 6 April to 5 April. Individuals who meet the conditions for filing must submit their return for the previous tax year by 31 January if filing online, or by 31 October if filing on paper. The return will detail all taxable income, any reliefs or deductions claimed, and the amount of tax owed or reclaimable.
Failure to file when required leads to a series of penalties, beginning with a £100 fine after the first day late. The longer the delay, the more severe the penalties become, with HMRC having the authority to estimate your tax bill and take recovery action if necessary.
Who Must Complete a Self Assessment Tax Return?
There are numerous scenarios that can trigger the requirement to file a Self Assessment tax return. If any of the following situations apply to you during the previous tax year, you are legally required to register and file.
Self-Employment and Sole Traders
If you were self-employed as a sole trader and your income was over £1,000 before deducting any expenses or reliefs, you must file a tax return. This threshold includes part-time work, freelance contracts, and side businesses, regardless of how infrequently you trade. Even if your profit after expenses is small, the gross income alone determines whether a return is required.
Trading Through Online Platforms
Selling products or services through online marketplaces such as Amazon, eBay, Etsy, or Vinted can qualify as a trade if it results in income over £1,000 annually. If you’re regularly buying and reselling items, making crafts to sell, or monetising a hobby, it’s considered a business by HMRC, and a return will likely be required.
Partnership Involvement
If you were a partner in a business partnership, you are required to complete a Self Assessment tax return. The partnership itself must also submit a separate tax return that shows how the profits were divided. Each individual partner must then report their share of income on their own return.
High Total Taxable Income
Anyone with taxable income over £150,000 for the year must file a tax return, regardless of how that income is made up. This includes earnings from employment, self-employment, dividends, pensions, and property income combined. Even if all income was taxed through PAYE, this threshold still requires reporting to HMRC.
Income from Property Rentals
If you receive income from renting out property or land, including homes, garages, or holiday lets, you must report this income through Self Assessment if it exceeds £1,000 a year. The allowance is a flat exemption and does not permit deductions of expenses in lieu of the exemption. Income from Airbnb or short-term holiday lets also falls into this category if it exceeds the threshold.
Capital Gains on Assets Sold
You need to file a Self Assessment tax return if you owe Capital Gains Tax on any profit made from selling assets such as a second home, investment property, shares, business assets, or high-value personal possessions like artwork, antiques, or jewelry. While your car is usually exempt, other items sold for £6,000 or more and not covered by specific exemptions may generate a taxable gain.
High Income Child Benefit Charge
If you or your partner earned more than £50,000 during the tax year and you received Child Benefit payments, you may be liable for the High Income Child Benefit Charge. This clawback must be reported through the tax return and the appropriate amount repaid to HMRC. Not declaring it may lead to penalties and interest on unpaid amounts.
Dividends, Savings, and Investment Income
Individuals who received income from dividends, savings interest, or other investments above the tax-free allowances must report this income. For the 2023/24 tax year, the dividend allowance was £1,000, and it drops to £500 in 2024/25. Similarly, interest from bank accounts or savings bonds must be reported if it exceeds the Personal Savings Allowance.
Overseas Income
If you are a UK tax resident and received income from overseas, such as foreign rental properties, business earnings, pensions, or interest, this must be included in your return. Even if the income was taxed abroad, you may still be required to declare it in the UK and claim relief under double taxation agreements if applicable.
Tips, Commissions, and Irregular Income
Tips received in cash or via card that are not processed through your employer’s payroll are taxable. Commission payments not taxed through PAYE also fall under the same rule. If these earnings are significant enough to push you over the thresholds or come in regularly, they need to be declared through a Self Assessment return.
Situations Where You Might Choose to File
While many individuals must file due to legal obligations, others may opt to file voluntarily to benefit from tax reliefs or other advantages. Common scenarios include:
- Claiming tax relief on pension contributions above basic rate
- Declaring charitable donations for Gift Aid tax relief
- Proving self-employment status for access to Maternity Allowance or Tax-Free Childcare
- Making voluntary National Insurance contributions for State Pension eligibility
In these cases, choosing to complete a return may lead to a tax refund or ensure access to important benefits.
Company Directors and Filing Obligations
Being a company director does not automatically mean you must file a tax return. However, you will be required to submit one if:
- HMRC has specifically requested it
- You receive dividends that exceed the annual dividend allowance
- You have untaxed income from other sources
- You are liable for the High Income Child Benefit Charge
- You receive other taxable income such as rental income, foreign earnings, or investment returns
If your only income is through the company payroll and you pay all necessary taxes through PAYE, you may not need to file. In such cases, you can contact HMRC to request withdrawal of the notice to file if one was issued in error.
People Who Do Not Need to File a Tax Return
There are several categories of individuals who typically don’t need to file, provided their income remains within specific limits and all tax is handled through PAYE. These include:
Employees With No Other Income
If you are fully employed and your only source of income is your salary or wages, which are taxed through PAYE, and you don’t have any untaxed income, you are not required to submit a tax return.
Low-Income Sole Traders and Landlords
If you earn £1,000 or less annually from sole trading or from renting property, your income is covered by the trading allowance or property allowance, respectively. In these cases, you’re not required to register for Self Assessment unless you wish to claim allowable expenses that exceed the £1,000 allowance.
Overseas Residents with UK Income
If you live abroad and receive UK-based income such as a pension or rental income and your earnings fall within the UK’s Personal Allowance, you may not need to file a return. This depends on your eligibility for the Personal Allowance and whether taxes have already been deducted at source.
Combination of Allowances
You can use both the trading allowance and property allowance in the same tax year. If your income from both streams stays within the £1,000 threshold for each, and you have no other taxable income, there is no requirement to file.
What Happens If You Miss Filing When Required
If HMRC issues you a notice to file a Self Assessment tax return, you are legally obliged to complete it—even if you had no taxable income. Ignoring the notice or missing the deadline leads to a fixed penalty of £100. This fine applies even if there is no tax to pay.
If the delay continues, further penalties are added:
- After 3 months: £10 per day up to 90 days
- After 6 months: Additional £300 or 5% of the tax due
- After 12 months: Another £300 or 5% of the tax due
HMRC can also issue an estimated tax bill, initiate recovery proceedings, and add interest on unpaid amounts. In more serious cases, continued failure to file can be treated as tax evasion, which may result in prosecution and even imprisonment.
How to Register for Self Assessment and Set Up Your HMRC Account
Once you determine that you need to file a Self Assessment tax return, the next step is to register with HMRC. Registration is not automatic—even if you’re earning income that requires reporting, HMRC will not begin the process unless you initiate it. For first-time filers, the registration deadline is 5 October following the end of the tax year in which you earned the income.
Failure to register by this date could result in fines and interest on unpaid tax, especially if the return is submitted late or if payments are missed. This guide will walk you through the steps to register, set up your online account, and prepare to file your first return.
When and Why You Must Register
The tax year in the UK runs from 6 April to 5 April. You must register for Self Assessment if, during that tax year, you:
- Became self-employed
- Started earning untaxed income (e.g., from property, dividends, or investments)
- Became a partner in a business partnership
- Incurred a liability for Capital Gains Tax
- Became liable for the High Income Child Benefit Charge
- Received foreign income while being UK tax resident
If you have filed a Self Assessment return before, you do not need to re-register. However, if you have previously deregistered or if your circumstances have changed significantly, you may need to update your records.
Registering as a Self-Employed Individual
If you became self-employed as a sole trader, the most common way to register for Self Assessment is through HMRC’s online portal. You will also be enrolled for Class 2 National Insurance contributions during this process.
Here is how to register:
- Go to HMRC’s Self Assessment registration page
- Select the option that applies to you (most new traders select “Register if you’re self-employed”)
- Complete the online form providing:
- Full name
- Current and previous addresses
- National Insurance number
- Date of birth
- Gender
- Date you started your business
- Nature of your business
- Business address and contact information
Once submitted, you’ll receive a confirmation and a Unique Taxpayer Reference (UTR) by post, usually within 10 days (or 21 days if you are registering from abroad). This UTR is essential for filing your tax return and must be kept safe.
Registering for Other Reasons
You can also register for Self Assessment if you’re not self-employed but still have taxable income that must be reported. This applies to:
- Property income above the £1,000 allowance
- Dividend or savings income above the allowance
- Income from abroad
- Employment with complex tax affairs
- Receiving Child Benefit with income over £50,000
In these cases, you will still use the HMRC portal but select a different route called “Register for Self Assessment if you’re not self-employed.” This uses form SA1, which can be submitted online or by post.
Information required for SA1 includes:
- Personal details
- National Insurance number
- Income sources and estimated amounts
- Date the income first started
You’ll receive a UTR after this registration, which enables you to set up your online account and file your return.
Setting Up Your Government Gateway Account
The Government Gateway is HMRC’s secure online platform for managing personal tax accounts. If you do not already have one, you’ll need to create it before filing your Self Assessment return. Here’s how:
- Visit the Government Gateway page
- Click on “Create sign in details”
- Enter your email address and confirm it with a verification code
- Create a user ID and password
- Save these credentials securely—they’re required for all future access
Once your account is created, you’ll need to verify your identity. HMRC provides a few different options for this process, such as using:
- Your UK passport
- A payslip or P60 from your employer
- Details from a tax credit or self-assessment letter
Once verified, you can add Self Assessment to your account using your UTR. If you’ve only just registered, wait for the UTR to arrive in the post before continuing.
Receiving Your UTR and Activation Code
After registering, HMRC will post two important items to your address:
- Unique Taxpayer Reference (UTR) – This 10-digit number identifies your tax account. You’ll need it to complete your tax return and to communicate with HMRC about Self Assessment matters.
- Activation Code – A separate letter containing an activation code will arrive a few days after your UTR. This code allows you to complete the setup of your Self Assessment service online.
You must activate your Self Assessment service within 28 days of receiving the code. If you miss this window, you’ll need to request a new activation code. Once activation is complete, you can access your online tax account, view your Self Assessment dashboard, and file your return.
What to Do If You Already Have a UTR
If you’ve previously filed a Self Assessment tax return but stopped for a few years, you may still have an active UTR. In this case, you do not need to re-register. Instead, log in to your Government Gateway account and check whether Self Assessment is still active.
If the service was deactivated, you can reactivate it by contacting HMRC or by enrolling again through your online account. Your old UTR remains valid for life and can be reused whenever you need to file.
It’s important to ensure that your contact details and income information are updated. Failing to do so can lead to missed deadlines and fines, even if you were unaware that you had been issued a notice to file.
Deadlines for Registration and Filing
The key registration deadline for first-time filers is 5 October after the end of the tax year in which the income arose. So, if you earned taxable income during the 2024/25 tax year (ending 5 April 2025), you must register by 5 October 2025.
The two main filing deadlines are:
- 31 October: Paper tax returns
- 31 January: Online tax returns
If you miss the paper deadline, you can still submit online without penalty until 31 January. However, both the return and any tax due must be submitted and paid by 31 January to avoid fines.
Keeping Accurate Records
As soon as you register for Self Assessment, it’s your responsibility to maintain records of your income and expenses. HMRC expects you to retain documents for at least five years after the 31 January submission deadline of each tax year.
Depending on your income source, this may include:
- Invoices and receipts for self-employment
- Bank statements
- Rental agreements and letting statements
- Dividend vouchers and interest statements
- Foreign income reports and exchange rate calculations
- Evidence of pension contributions or charitable donations
Organised and timely record-keeping helps ensure your tax return is accurate and reduces the risk of underpayment, overpayment, or HMRC investigations.
Special Considerations for Non-Residents
If you are a UK non-resident for tax purposes but receive UK-sourced income, you may still need to file a Self Assessment return. This is particularly relevant for:
- UK rental income
- UK pensions exceeding the Personal Allowance
- Capital gains on UK property
You can still register using form SA1, and you’ll need to confirm your residency status on the return using the SA109 supplementary form. You may also need to apply for the Personal Allowance separately if you are not automatically entitled to it.
Common Mistakes to Avoid During Registration
Registering for Self Assessment is generally straightforward, but several common errors can lead to delays or fines. These include:
- Registering late and missing the 5 October deadline
- Providing incorrect personal details (especially your National Insurance number)
- Losing your UTR or activation code and having to restart the process
- Forgetting to activate Self Assessment on your Government Gateway account
- Assuming your employer or accountant will register on your behalf
To avoid these issues, make sure to start the registration process early, double-check all submitted information, and keep correspondence from HMRC in a safe place.
Updating Your Details
After registering, you must inform HMRC if any of your details change, including:
- Business address
- Nature of business
- Contact information
- Change in employment status
- Cessation of trading or income source
Failing to update your details may lead to missed notices, miscommunication, and potential penalties. You can update your information through your Government Gateway account or by contacting HMRC directly. It’s best to act promptly to ensure that all notices, UTR letters, and activation codes reach you at the correct address.
How to Complete and Submit Your Self Assessment Tax Return
Filing a Self Assessment tax return is a legal obligation for those with untaxed income or other tax liabilities that are not settled through PAYE. Once registered and in possession of your Unique Taxpayer Reference (UTR), the next step is preparing and submitting your tax return accurately and on time.
Whether you’re self-employed, a landlord, or have other sources of taxable income, understanding the filing process, the correct forms, and how to report various income types is essential. This guide breaks it all down in detail.
Overview of the Self Assessment Return (SA100)
The main form used for Self Assessment is the SA100. This is the core tax return form for individuals and includes sections for basic income sources, tax allowances, and tax reliefs. Depending on your circumstances, you may also need to complete one or more supplementary pages.
Common supplementary forms include:
- SA103: Self-employment income
- SA105: Property income
- SA102: Employment income (if you have multiple jobs or taxable benefits)
- SA106: Foreign income
- SA108: Capital gains
- SA109: Non-residency status
Each form corresponds to a specific type of income or tax situation. When filing online, the HMRC system will automatically ask for these if your declared income requires them.
Gathering Information Before You Start
To file your return correctly, it’s important to collect all relevant financial information for the tax year, which runs from 6 April to 5 April of the following year. Depending on your income streams, this may include:
- Bank statements
- Invoices and receipts
- Employment payslips and P60/P45 forms
- P11D if you received taxable employment benefits
- Rental income statements
- Records of business expenses
- Dividend vouchers and investment statements
- Pension and gift aid contributions
- Details of any capital assets sold
Keeping organised records throughout the year simplifies this process and reduces the chance of mistakes.
Logging Into Your Online Account
If you’re filing online, sign into your HMRC account through the Government Gateway. Once logged in, go to the Self Assessment section, where you will see the option to start a new return. The system will guide you step-by-step, asking questions to determine which supplementary pages apply.
Online filing has several advantages:
- Automated calculations
- Fewer chances of arithmetic errors
- Immediate submission confirmation
- Access to payment options
- Integration with your account for future tracking
Make sure your login credentials are secure and available when you need them. If you’re unable to log in, you may need to reset your details or request support from HMRC.
Completing the SA100 Form
The SA100 form begins with your personal information, such as name, address, date of birth, and UTR. You’ll also be asked to:
- Declare your employment status
- Confirm whether you received any benefits or allowances
- Specify income sources
- Enter amounts for reliefs or expenses
You must also confirm whether you want to receive paper correspondence and whether you have student loan repayments due. Once these are completed, the system directs you to the appropriate supplementary pages based on your declared income.
Reporting Self-Employment Income (SA103)
If you’re self-employed, you’ll complete the SA103 form. There are two versions:
- SA103S (short): For businesses with income under £85,000
- SA103F (full): For businesses with income above £85,000 or needing more detailed expense breakdowns
You’ll need to provide:
- Business name and description
- Start and end dates of the accounting period
- Turnover (gross income)
- Allowable business expenses
- Capital allowances (e.g., for equipment or vehicles)
- Any loss carried forward from previous years
The form automatically calculates your net profit or loss, which feeds into the main return for tax liability assessment.
Reporting Property Income (SA105)
For landlords and individuals renting out property, the SA105 form is used. You must declare:
- Total rental income for the year
- Allowable expenses (letting agent fees, insurance, maintenance, etc.)
- Wear and tear or replacement of domestic items
- Mortgage interest (if deductible)
- Income from jointly owned property (state your share)
You can claim a property income allowance of up to £1,000 if you received rental income below this threshold and choose not to claim expenses.
Employment Income and Benefits (SA102)
If you have employment income in addition to other earnings, complete the SA102. This includes:
- Pay from each job (with P60 or P45 as proof)
- Tax deducted at source
- Employer-provided benefits (P11D)
- Expenses not reimbursed by your employer
This is particularly relevant for directors or individuals with complex PAYE arrangements. It ensures tax is reconciled correctly across all income sources.
Capital Gains Tax (SA108)
If you sold any assets during the tax year that triggered a capital gain, you must complete the SA108 form. Assets can include:
- Properties (except your primary residence)
- Shares and investments
- Jewellery, art, or antiques
You must calculate:
- Disposal proceeds
- Acquisition cost
- Allowable costs (e.g., improvements, broker fees)
- Gain or loss
You are allowed a tax-free capital gains allowance each year. For 2024/25, it stands at £3,000. Only gains above this amount are taxable.
Foreign Income (SA106)
If you received any income from outside the UK, such as foreign dividends, overseas employment, pensions, or rental income, complete the SA106. You may also need to account for any foreign tax paid and apply for double taxation relief, if applicable.
This is important for UK tax residents who have global income responsibilities. Failing to declare foreign income can result in significant penalties.
Declaring Tax Reliefs
Within your SA100 or supplementary pages, there are opportunities to claim allowable tax reliefs that reduce your liability. These include:
- Gift Aid donations to registered charities
- Private pension contributions
- Interest on qualifying loans (e.g., for investments or partnerships)
- Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), or Venture Capital Trust (VCT) investments
Make sure you have supporting documentation for each relief claimed. Incorrect entries can delay processing or trigger an investigation.
Calculating Your Tax Owed
Once you complete your return, the system will automatically calculate the amount of tax owed based on your declared income and reliefs. This includes:
- Income Tax bands (basic, higher, and additional rates)
- National Insurance contributions (Class 2 and Class 4 for self-employed)
- Capital Gains Tax (where applicable)
- Student loan repayments
- High Income Child Benefit Charge (if relevant)
You’ll see a breakdown of your tax bill before final submission. This amount must be paid by 31 January following the end of the tax year.
Submitting Your Return
Once satisfied with your entries, click the final submission button. The system will:
- Confirm receipt of your return
- Issue a submission receipt number (save this for your records)
- Provide instructions for payment
You can make payment immediately or return later to settle the balance. It’s essential to ensure that funds clear into HMRC’s account by the due date to avoid penalties.
Payment Options
Tax can be paid via:
- Direct debit
- Online banking
- Debit or corporate credit card
- Bank transfer
- At your bank or building society
If you’re unable to pay in full, you may be able to set up a Time to Pay arrangement with HMRC. Contact them before the deadline to avoid automatic penalties and interest.
Penalties for Late Filing and Payment
Missing the filing deadline of 31 January results in an automatic £100 fine, even if no tax is owed. Additional penalties apply if the delay continues:
- After 3 months: £10 daily penalty (up to 90 days)
- After 6 months: Further 5% of tax due or £300 (whichever is higher)
- After 12 months: Another 5% or £300, plus potential increased penalties for deliberate evasion
Late payments incur interest plus a 5% surcharge on unpaid tax after 30 days, 6 months, and 12 months. To avoid these, submit and pay early where possible. If you’re struggling to meet the deadline, consider requesting a filing extension or estimated return.
Amending a Submitted Return
If you realise you made a mistake after submitting, you have 12 months from the filing deadline to amend your return. To do this:
- Log into your HMRC account
- Choose the tax year
- Select “Amend Return”
- Make the necessary changes and re-submit
You may receive a refund or an additional bill based on the correction. Keep records of any adjustments for your future reference.
Voluntary Disclosures and Reducing Penalties
If you failed to declare income in previous years, it’s better to voluntarily disclose this to HMRC than wait for them to investigate. Voluntary disclosures typically result in:
- Reduced penalties
- Lower interest charges
- Avoidance of legal proceedings
You can use the HMRC Digital Disclosure Service or contact them directly for guidance on how to make a full and accurate disclosure.
Seeking Professional Help
While many individuals complete their Self Assessment without professional support, those with more complex situations may benefit from advice. This includes:
- Those with multiple income streams
- Landlords with joint ownership
- High earners subject to child benefit charges
- Individuals with foreign income
- Self-employed with fluctuating profits
Accountants and tax advisers can help you reduce tax legally and avoid errors that lead to penalties. Choose a regulated professional familiar with UK tax law.
Conclusion
Understanding whether you need to complete a Self Assessment tax return is essential for staying compliant with UK tax laws and avoiding unnecessary penalties. While less than a fifth of the UK population is required to file a return, millions still face unexpected fines each year—often because they were unaware of their filing obligations or missed critical deadlines.
Self Assessment is not limited to the self-employed. It applies to anyone with untaxed income, including rental profits, foreign earnings, dividend income, or capital gains. Even company directors or high earners claiming Child Benefit may fall within its scope. Recognising these triggers early in the tax year gives you time to register with HMRC, gather necessary documents, and prepare a complete and accurate return.
Registration must be done by 5 October following the end of the tax year, and your return must be filed by 31 January if completed online. Missing either of these deadlines can lead to automatic penalties—even if no tax is due. That’s why understanding your income, record-keeping obligations, and potential reliefs is crucial. Filing on time not only ensures legal compliance but also gives you peace of mind and the opportunity to optimise your tax liability through valid deductions and claims.
Whether you’re reporting self-employed profits, property income, or capital gains, the Self Assessment process requires attention to detail. Knowing which supplementary forms to complete, how to calculate your tax correctly, and how to submit your return securely through HMRC’s online portal are key steps toward successful compliance. And if you’ve made an honest mistake or omitted income in the past, voluntary disclosure offers a path to rectify it with reduced penalties.
For those with simple tax affairs, handling Self Assessment personally is manageable with care and preparation. For others with more complex situations—such as multiple income sources or international dealings—professional advice can be invaluable in ensuring accurate reporting and tax efficiency.
Ultimately, being proactive, organised, and informed can turn Self Assessment from a source of stress into a smooth, routine part of your financial year. The responsibility to file may be yours—but with the right approach, it doesn’t have to be overwhelming.